David Tooley

Would-be first-time buyers in Northamptonshire have been challenged to prove just how much they want their dream home by acting now to start saving for the deposit.

With interest rates at an historically low level – but with some economists arguing that they should soon rise – this in some ways is a golden age for potential buyers that cannot last forever.

According to an online search, a 25-year mortgage on a property bought for £150,000 would, for an initial period at a rate of 1.6 per cent, cost £607 per month. That is a level at least comparable to the monthly rent for a terraced house in Northamptonshire, according to a search on Rightmove.

The arguments for buying a property instead of renting one are well rehearsed. The rented property can never be yours, while buying one with a mortgage is the opposite, and historically a home is an asset that only increases in value.

A sticking point is traditionally the much-feared deposit, the amount of money a buyer has to stump up towards the cost of a flat, apartment, terraced or detached home.

A deposit is typically between 5 and 30 per cent of the property value, so between 7,500 and £45,000 on a home valued at £150,000.

At first glance, that is a lot of money for someone aged between 24 and 35 on a joint income of, say £35-40,000. But there are ways to reduce the cost and start saving to get on the ladder and achieve your property dreams.

The option of shared ownership is worth exploring. That is where a buyer only uses a mortgage to pay for a share of property. That would immediately cut deposit required.

There are schemes available from the government, including Help to Buy. If you are saving to buy your first home, the government will boost savings by 25 per cent.

The maximum government bonus you can receive is £3,000. However, the accounts are available to each first time buyer, not each household. This means that if you are planning to buy with your partner, you could receive a bonus of up to £6,000.

Northamptonshire mortgage expert Edward Cookman, of Barfield Financial Advisors, in Billing Road, Northampton, said: “In today’s world, where everyone is busy juggling priorities, it is easy to put off sorting out your finances until tomorrow. But, tomorrow never comes, so act now to achieve your dreams.

“In the world of financial planning there is a principle called deferred gratification. It means not doing some things now, so that you can have a better life in the future. It applies very much to mortgages, where plans can be put in place essentially to save money.”

Mr Cookman listed some ways in which people could start saving serious amounts of money to put towards their deposits.

1. Starts a household budget: Get to know where every penny goes.

2. Find out about cheaper brands on things like make up and haircuts.

3. Take extra shifts at work, if you can.

4. Buy supermarket own brands instead of the better-known and advertised ranges.

5. Think very seriously about holidays, if and where they are taken and how much money is spent away from home.